Interstate developers want to transform a landmark Devonport music store into retail outlets and inner city apartments with a communal focus.

Queensland-based Ian Ugarte and partner Simon Want, of Melbourne, purchased the building at 10 Edward Street where Red Hot Music used to be with a plan to create affordable inner-city housing.

Mr Ugarte’s interest is in the micro-apartment, rooming house and boarding house side of the housing market.

He said Australia’s affordable housing crisis led him to rethink views on space and property and how to live and invest in the market.

He said the new face of Australian homelessness is women in their 50’s and 60’s as a result of divorce, rising rents and the pay gap. He said when people could not afford a place to live it upset him.

Mr Ugarte said the family home in Australia had gone bigger but fewer people lived there.

“We actually build the largest houses in the world and it’s not sustainable. We’re building the wrong product for the market that needs it,” he said.

Mr Ugarte calls himself a “social capitalist”.

“I decided my development projects had to be for the community to benefit and make money. Our focus is to create good, affordable housing with good community outcomes.”

Mr Ugarte said with the population base in Devonport the city needs a different style of accommodation.

“We want to create diverse housing which gives people the ability to afford to live better and two retail shops.

“It’s a different style of housing with eight separate strata title units.

“There are two shops, two one-bedroom residences, two two-bedders and two communal residences which have a common kitchen and dining area and five self-contained rooms in a studio set-up.

“There is a huge need for small dwellings and single-bedroom accommodation for people who don’t need a big house but want to be close to other people and still have a sense of community.

“The Edward Street building will have a central communal courtyard which all the dwellings look down into or are part of the courtyard and if you don’t choose to use the area that’s fine.”

Mr Ugarte said it’s housing for people who want to help each other and contribute to the community it creates.

“It’s co-living and more like the community I grew up in where you look to help each other out.”

Mr Ugarte said he’d spoken to all 29 councils in the state and Devonport is his first choice because of the council being proactive through the Living City project, where the desire is to have more people living in the city centre.

Mr Ugarte said the development application for Edward Street had been approved. He hoped to start building works this year.